Financials, Tech Pace S&P 500 Climb To Fresh Highs

Steve Schaefer
,
Forbes Staff
If you can put the word markets after it, I cover it.

(Photo by Spencer Platt/Getty Images)

The Federal Reserve says it may start dialing back asset purchases this summer, but Wall Street doesn't seem worried Wednesday with stocks flying Wednesday and driving the major averages to fresh nominal highs.

An accomodative central bank providing extraordinary stimulus is one element to the rally, and the minutes from the Fed's March meeting indicated committee members are discussing when to ratchet back that stimulus Wednesday. The release came hours earlier than planned after being accidentally sent to congressional staffers and trade groups Tuesday afternoon, but the warnings in the minutes more or less fell on deaf ears.

Several members indicated that tapering the Fed's $85 billion in monthly asset purchases as early as this summer may be warranted, not because of any sharp improvement in the labor market outlook but because the costs of its program could start to outweigh the benefits. (See "Fed Minutes: QE Slowing Down This Summer?")

That drew little concern from the market, with stocks starting the day in the green and extending those gains in the first two hours of trading. The Dow Jones industrial average jumped 124 points to 14,798, the S&P 500 more than 1% with a 16-point gain to 1,584 and the Nasdaq rose 48 points to 3,286.

Technology and financial shares were the best-performing on a sector basis, up more than 1% apiece. With consumer discretionary stocks in third place there was a clear cyclical tilt to Wednesday morning's rally.

The financial rally came just days before reporting season for the space kicks off.
JPMorgan Chase and
Wells Fargo are each due to submit first-quarter results before the opening bell Friday. While the pair had respectable gains Wednesday -- up 1.4% and 0.7% -- they were outpaced by the likes of
Morgan Stanley, which rallied 2.7% , and
Citigroup, which picked up 2.6%.

Another winner was Taylor Morrison, the homebuilder that made its debut Wednesday after raising more than $600 million in an initial public offering. Shares gained 5.5% in their first few hours of trading.

JC Penney was among the stocks left out of the morning's rally. The retailer lost 2.2% as it settles into life after Ron Johnson, the former chief executive who was sent packing Monday after a 17-month turnaround effort that was met with crumbling sales and awash in red ink. (See "Did J.C. Penney Fire Johnson At The Exact Wrong Time?")